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John Pappadakis nearly had a heart attack from joy when he opened the property tax notice for the nursing home he owns in Salt Lake City.

Taxes on Midtown Manor dropped $8,700 even though the commercial property increased in value from $1.03 million to $1.11 million.Surely it's a mistake, Pappadakis said.

"It makes me feel tremendous," he said. But he's skeptical. "I can't see them leaving it like that. It's gone up every year since I bought it in 1988."

It's no flub on Salt Lake County's part.

Like many other businesses in the county, Pappadakis is a beneficiary of a countywide reappraisal and of tax changes by the Utah Legislature.

The county assessor's office reappraised all property in the county this year, ending an assessment cycle on residential property. The result is that home values have increased about 60 percent on average. Residential property taxes have increased about 12 percent.

But because the assessor's office reappraised commercial property annually through 1993, there was less of a jump in market values in most cases. The average business property increased about 22.9 percent.

With homeowners picking up more of the tax tab through higher property valuations, the tax burden is shifting away from commercial properties.

In some cases, commercial properties increased in value, but taxes still fell. The copper-topped Utah One Center, 201 S. Main, increased $2.2 million in value, from $42.8 million to $45 million. Property taxes dropped $88,851.

The owner of the Cottonwood Mall, JP Realty, ought to crow about its tax break. The value of the mall rose from $61.7 million to $63.1 million, while taxes plummeted from $1.06 million to $880,000 - a drop of $181,000.

Businesses that provide housing, such as apartment complexes and nursing homes like Midtown Manor, received a double bonus: the effect of a tax shift and the Legislature's increase in the residential exemption from 32 percent to 45 percent.

"Those apartment complexes, because of the residential exemption, are receiving a significant decrease in taxes they'll pay this year," said Tim Noyce, a division administrator in the assessor's office.

And, of course, there were tax cuts for commercial properties that didn't change in value at all.

For example, the value of the Expo Mart Building, 230 W. 200 South, remained flat at $5.6 million. Taxes fell from $109,000 in 1994 to $93,000 this year, a decrease of about $16,000.

Alliant Techsystems (formerly Hercules) is another business more than pleased with County Assessor Lee Gardner's approach to appraisals.

The total value of five of Alliant's more than 20 commercial properties fell from $101.2 million to $68.9 million. The taxes on those five properties went down about $800,000. The assessment reflects the fact that Alliant has downsized its operations significantly. And unlike most residences, commercial property depreciates.

"We've battled for years for a true evaluation," said David Niponski, Alliant spokesman. "We finally got an assessor who understands the business approach to appraisal."

After years of paying "more than our fair share," Alliant is finally benefiting from a "truer" reflection of market values for all properties, Niponski said. And that is "extremely helpful in keeping us competitive in maintaining our business base in a very competitive industry."

Despite their good tax news, many businesses are uneasy about their increased property values. If higher values aren't checked and challenged, the businesses could be hit hard by future tax increases - which are more difficult to fight than an individual property value.

So although taxes decreased about $5,000 on the main chunk of land at the VIP Mobile Home Park at 1350 W. North Temple, the management firm that owns the park may appeal the valuation. It increased from $2.06 million to $2.08 million.

"You aren't going to argue that taxes went down and you many not even argue the value, but in a year or two when the county raises the (certified rate), they've got you because you can't argue (the rate)," said Darren Menlove, a partner in VIP Residential Communities.

In fact, homeowners could learn a lesson from the skeptical attitude businesses take to valuations and tax assessments. Noyce said commercial property owners are "much more aggressive" in appealing to the Board of Equalization for relief year after year.

Pappadakis is among the commercial property owners who've made perennial appearances before the board to protest.

"I still don't agree with what it's appraised at," Pappadakis said. "It's too high. I don't believe a building in this location can be worth $1.1 million."